Bank of New Zealand is ramping up cross-channel fraud prevention for its customers through a multi-million dollar deal with IBM.
The banking giant said its aim was to provide its customers with the ability to bank securely while delivering a positive customer experience.
Furthermore, BNZ said legacy systems were designed to see and stop easily recognisable fraud patterns, however, modern "anytime, anywhere" banking on mobile devices has made fraud detection much more challenging.
"Banks’ time to respond is also shrinking as real-time payments mean there are just milliseconds to detect and prevent theft before it’s too late," the bank said.
Global card fraud losses are also increasing. From 2016 to 2025, they are projected to nearly double, climbing from US$22.8 billion to nearly $50 billion, according to The Nilson Report.
As a result, BNZ selected IBM Safer Payments, a transaction monitoring solution that it said allows banks to intercept fraudulent activity before it happens, while ensuring customers’ genuine transactions are not stopped in error.
IBM Safer Payments uses machine learning and artificial intelligence to analyse behaviour and fraud patterns, build and adapt models of emerging fraud threats, and recommend countermeasure responses.
"We are ruthlessly vigilant in protecting our customers’ trust in us, and we put security front and centre so they can be sure their money and personal information is well-protected," said Owen Loeffellechner, chief safety and security officer at BNZ.
"With IBM Safer Payments, we are stepping up this protection, analysing every transaction in real time, but without sacrificing the customer experience."
IBM's technology uses both financial and non-financial data together with a customer’s transaction history to perform authentication and profiling on every transaction - this allows fraudulent transactions to be identified and stopped or put on hold pending further validation.
"Banks are facing the challenge of needing to adapt to meet their customers’ evolving expectations for a frictionless transaction, while also ensuring their security,” said Mike Smith, managing director of IBM New Zealand.
"With financial crime becoming increasingly sophisticated, BNZ partnered with IBM to address the rising threat of crime and fraud while still enabling top quality experiences for customers and allowing for future growth."
Implementation is underway and customers will receive the heightened security services within weeks, BNZ said.